Foreigners can safely buy property in Mexico and enjoy the full rights of ownership
in México is quite different than buying in the USA. However, it can be
done in a completely safe manner. The most important component in the
purchase of real estate in México is a qualified, knowledgeable, local
real estate specialist from a reputable, recognizable company working
for your benefit. They can guide you to safely-acquirable property and
guide you through the purchase process with the seller, lawyer and
It is a common misconception that only
Mexicans can own real estate in México. There are two legal vehicles
foreigners can use to safely own property in México:
- Escritura – for property not in the Restricted Zone (see below). If
the property is in the Restricted Zone, it can be purchased by a
corporation that is wholly-owned by foreigners. The latter is more
typically used with commercial property, but it has also been used for
- Fidecomiso – where the Bank becomes the trustee holding title and the
buyer becomes the beneficiary of the trust. The buyer enjoys all of the
same rights they would have in fee simple ownership: the rights to buy,
sell, lease, use, bequeath, improve, transfer and encumber. A
Fidecomiso works much the same way as a family trust in the United
States. This is the simplest, safest way for a foreigner to hold real
property in coastal México.Read more on Mexican Bank Trust .
What is the Restricted Zone?
Article 72 of the 1917 Mexican Constitution defines the Restricted Zone
as any property that lies within 100 kilometers (62 miles) of the
border and 50 kilometers (31 miles) of the coast. This Zone was
established to protect the sovereignty of México after the incursions
by other countries in the 1800’s. In 1973, the Foreign Investment Law
was established to allow non-Mexicans to hold title in the Restricted
Zone through a 30-year renewable bank trust. In 1993, the Foreign
Investment Law was amended to allow bank trusts to be renewable for
50-year periods. Associated legislation was overhauled and tightened
up. The new legislation, in conjunction with NAFTA, created a stable
and safe investment environment. These changes are, in part, propelling
the current surge in investments in Mexican coastal real estate. Read more on Mexico's Federal Zone .
The Mexican government can NOT and does NOT Seize Foreigners Property.
There have been stories in the news that imply that the Mexican
government can arbitrarily confiscate foreign-owned properties. In
every case, the properties in dispute were lawfully owned by another
party and the courts where merely acting to return the property to the
rightful owner (not the Mexican government). A qualified, local real
estate professional can guide you past any potential risk in this area.
What protection does NAFTA provide?
There are provisions within NAFTA that protect investments made by US
citizens in México and provide a specific, impartial resolution process
for any issues that arise. In recent years, major US developers, hotel
chains and institutional investors have invested hundreds of millions
of dollars in Cabo San Lucas. Now their attention is focusing on
Northern Baja, and buyers should have a high level of confidence in
investing this area today.
Why is investing in Mexican real estate so popular these days?
Buyers can now get title insurance through reputable US companies like
First American Title. This has become available as a result of the
Foreign Investment Law.
Plush, Rivera-style, coastal homes in exclusive, secure, resort
settings are priced in a range that is significantly more accessible
than prices north of the border. The resort communities of Northern
Baja are as luxurious and upscale as their cousins down south with the
added advantage of being driving distance from most of the southwest
and less than 1 hour from the San Diego Airport.
Given the quantity and popularity of quality pre-sale opportunities,
the importance of dependable escrow services has become imperative.
Escrow services have created another level of security for
transactions. However, read escrow instructions carefully as they can
vary significantly and the release of funds is not always the same as
in the US. When considering a pre-sale, make certain to ask the right
• Certificate of no liens?
• Title insurance for the project?
• Can a Fidecomiso eventually be obtained and what is the time frame?
• What are the details of the escrow programs?
Be an Informed Investor
Land deeded to the indigenous communal people of México. This land must
go through a process of agrarian reform and privatization before it can
be sold. Seek competent legal advice before proceeding.
The 99 year lease
A land lease is not an ownership vehicle. Land leases can only be
established for less than 10 years. There are no 10+10+10 agreements
that are legally binding. There is no longer the legendary “99 Year
Lease”. In fact, there really never was. Land leases are not an
investment and involve nothing more than the right to use the land for
a period of time. Any improvements remaining at the end of the lease
will revert to the landowner.